Trump win likely to be viewed negatively across assets in the short-term - Deutsche Bank

Research Team at Deutsche Bank, suggests that the Trump win is likely to be viewed negatively across a wide range of assets in the short-term but the range of medium-term outcomes are much wider.

Key Quotes

“It increases the chance of higher fiscal spending but it will also reinforce the backlash against globalisation and associated forces of which migration policy and trade are obviously likely to be heavily scrutinised. So as the trend is already pointing to, expect lower risk assets at first, lower bond yields on a flight to quality but then higher yields once his spending plans are digested and an equity market that might at some point benefit from reflationary policies but with greater risks (lower trade and global openness) and higher volatility.

It's very easy to say this is a big negative for the global economy but current policies around the world are perpetuating the soporific post GFC recovery. A shake up is badly needed but whether Trump is the right version of the shake up is open to debate. If Trump wins then that could increase the odds of both a better medium-term economic outlook and also a worse economic outlook. It also has geo-political ramifications that are hard to contemplate at this stage.

EM looks vulnerable as US self-interest could dominate. Trade deals could be ripped up. Ironically Trump has hinted that a trade deal with the UK could be a priority!! As an aside as someone that loves skiing, I do worry about climate change as a result of this result as Trump has threatened to pull the US out of the Paris climate change agreement. More time for cycling up mountains maybe rather than skiing down them.”